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Can Adidas (ADDYY) Manage to Beat Earnings Again in Q3?
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Adidas AG (ADDYY - Free Report) is slated to release third-quarter 2017 results on Nov 9. The question lingering in investors’ minds is whether this sporting goods behemoth will be able to deliver a positive earnings surprise in the quarter to be reported.
The company delivered a positive earnings surprise in the preceding quarter. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter under review is pegged at $1.57 per share, reflecting year-over-year growth of roughly 49%. We noted that our earnings estimate has been going up in the last 30 days. Further, analysts polled by Zacks expect revenues of $7.2 billion, up about 19.1% from the year-ago quarter.
Adidas forms part of the Consumer Discretionary sector. Per the latest Earnings Preview, the Consumer Discretionary sector’s earnings are expected to decline 1.2% year over year, while revenues are projected to grow 2.8%.
Factors at Play
Adidas’ shares have surged 38.3% year to date, outperforming the industry’s growth of 9%. The company has been buoyed by continued revenue growth at its Adidas brand, particularly in North America. In the last quarter, revenues at Adidas grew 21%, driven by double-digit growth in running category and strength in training category. Further, Reebok brand aided the top line, registering 5% growth, driven by strength in Reebok Classics. Further, e-commerce growth of 66% helped the stock.
Together, these growth drivers along with the company’s constant product launches and strong marketing initiatives make us hopeful about the company’s prospects. However, management remained dissatisfied with its performance in Russia in the last quarter, which was hurt by the ongoing challenging consumer environment and additional store closures.
For 2017, the company anticipates currency-neutral sales to advance in a range of 17-19% in 2017. It envisions net income from continuing operations to rise in a range of 26-28% to €1.360 - €1.390 billion. All said, let’s wait and see if Adidas can manage to put up another impressive show this time.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Adidas is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Adidas currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company has an Earnings ESP of -0.96% as the Most Accurate estimate of $1.55 per share is pegged lower than the Zacks Consensus Estimate of $1.57 per share. The combination of Adidas’ Zacks Rank #3 and ESP of -0.96% makes surprise prediction difficult.
Stocks with Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
The Home Depot Inc. (HD - Free Report) has an Earnings ESP of +0.76% and a Zacks Rank #2.
Ross Stores Inc. (ROST - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #2.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Can Adidas (ADDYY) Manage to Beat Earnings Again in Q3?
Adidas AG (ADDYY - Free Report) is slated to release third-quarter 2017 results on Nov 9. The question lingering in investors’ minds is whether this sporting goods behemoth will be able to deliver a positive earnings surprise in the quarter to be reported.
The company delivered a positive earnings surprise in the preceding quarter. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter under review is pegged at $1.57 per share, reflecting year-over-year growth of roughly 49%. We noted that our earnings estimate has been going up in the last 30 days. Further, analysts polled by Zacks expect revenues of $7.2 billion, up about 19.1% from the year-ago quarter.
Adidas AG Price and EPS Surprise
Adidas AG Price and EPS Surprise | Adidas AG Quote
Adidas forms part of the Consumer Discretionary sector. Per the latest Earnings Preview, the Consumer Discretionary sector’s earnings are expected to decline 1.2% year over year, while revenues are projected to grow 2.8%.
Factors at Play
Adidas’ shares have surged 38.3% year to date, outperforming the industry’s growth of 9%. The company has been buoyed by continued revenue growth at its Adidas brand, particularly in North America. In the last quarter, revenues at Adidas grew 21%, driven by double-digit growth in running category and strength in training category. Further, Reebok brand aided the top line, registering 5% growth, driven by strength in Reebok Classics. Further, e-commerce growth of 66% helped the stock.
Together, these growth drivers along with the company’s constant product launches and strong marketing initiatives make us hopeful about the company’s prospects. However, management remained dissatisfied with its performance in Russia in the last quarter, which was hurt by the ongoing challenging consumer environment and additional store closures.
For 2017, the company anticipates currency-neutral sales to advance in a range of 17-19% in 2017. It envisions net income from continuing operations to rise in a range of 26-28% to €1.360 - €1.390 billion. All said, let’s wait and see if Adidas can manage to put up another impressive show this time.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Adidas is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Adidas currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company has an Earnings ESP of -0.96% as the Most Accurate estimate of $1.55 per share is pegged lower than the Zacks Consensus Estimate of $1.57 per share. The combination of Adidas’ Zacks Rank #3 and ESP of -0.96% makes surprise prediction difficult.
Stocks with Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Wolverine World Wide, Inc. (WWW - Free Report) has an Earnings ESP of +1.37% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Home Depot Inc. (HD - Free Report) has an Earnings ESP of +0.76% and a Zacks Rank #2.
Ross Stores Inc. (ROST - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #2.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>